Opinion
- Editorial- Commentary
Mary
King: Peak
oil - less faith
The major players in the Peak Oil paradigm are
the energy importing and exporting countries and
the big international oil/gas companies (Big Oil).
Peak Oil consists of two complementary parts-the
demand for oil, driven in part by China and India,
outstripping the present supply forcing high prices,
and the fact that the international supply of oil
is at its peak or just past it. The exporting countries
may be physically unable to supply this demand.
Note the scramble by the Arctic countries to claim
that seabed for the petroleum it is perceived to
hold. The reactions by the three stakeholders are
interestingly different.
The importing countries are desperately looking
for alternative fuels, improving the efficiency
of the fossil fuel utilisation and are taking another
look at nuclear energy. The OPEC exporters are
collaborating on the marketing of a scarce resource
and constraining exports, forcing prices up (with
the related gas price increases) to what the market
could bear. Many exporting countries' industries
depended on, and gave large profits to, Big Oil,
companies that brought capital and expertise to
the table.
Exporting countries in this period of scarcity
are seeking to regain control of their resources
and they are looking towards direct exploitation.
Russia, Venezuela, Bolivia, Peru are in the process
of exerting more control over their resources and
Argentina is threatening Big Oil over their expenditure
in exploration. Government-owned oil companies
now control some 93 per cent of the world's proven
reserves.
With world wide shortages of oil and production
apparently past its peak, these governments have
finally appreciated that in co-operating they can
make the profits typical of Big Oil. Further, such
countries are looking at developing locally owned
higher added value downstream clusters to take
advantage of the knock-on price increases in petroleum
derivatives. Thus, exporting countries are using
their own people for industrial development and
where the skills are not available, importing other
expertise, not Big Oil. Lastly, many of these exporting
countries are cash-rich and their official reserves
can attract loans for local development. Big Oil
will assume their old roles moreso in underdeveloped
countries, whose governments have in the past squandered
oil earnings or stolen them.
Recently
we in T&T have been told that our
reserves of natural gas have declined and that
unless we find more gas we have some 12 years left
at the present production rate. I do not know if
this takes into consideration that production rates
will decline with consumption and that even before
the gas runs out we will be unable to meet the
present level of demand.
In spite of the reported doublespeak by our Government,
they acknowledge this present reserves constraint
and the only difference in opinion is-PM Manning,
the Good Shepherd of our economy, assures us that
HE knows that there is gas out there and we will
find it; there is no uncertainty, no need to worry.
Others think that while there may be more gas out
there, there may well be commercially little more,
given the big dud well of bpTT and the recent reluctance
of Big Oil to take up contracts to explore new
blocks. Given this legitimate uncertainty others
have joined this column in calling for the creation
immediately of the on-shore economy.
We
need, a priori, some conservation/exploitation
plan that will support our local needs (Chavez
has no intention of allowing Big Oil in T&T
to exploit his resources) in the event that we
do not find any more gas. This is the fundamental
failure of our present leadership in government-to
level with the people, to put them under stress
to find ways to develop an alternative economy.
The
conflict is between our faith-based Government,
led by a religious man, and others who are demanding
that the running of our economy should reflect
this UNCERTAINTY, which requires the development
of adaptive economic stratagems to cover various "what
if" scenarios. Coupled to this faith in
new gas finds our Government still sees itself
as a facilitator to Big Oil and is preparing
to offer more lucrative incentives to them to
go drilling, unfortunately subscribing in its
one-dimensional vision to the view that increasing
reserves is a function only of investment.
With its faith that we will always have gas, our
Government, in attempting to maximise cash flow,
has become a profligate spender, saved virtually
nothing and we are now in a position of high inflation,
with little capital resources, no proven reserves
to drive expansion and attract loans for local
added value development. Today's Budget will portray
this religious faith that we are indeed in the
Promised Land. We have two monkeys on our backs.
Mary
King is
an independent Senator and columnist
of the Trinidad Express (maryking@tstt.net.tt).
Petroleumworld
not necessarily share
these views.
Editor's
Note: This article was first publish in Trinidad
Express, Monday, August 20th 2007. Petroleumworld
reprint this article in the interest
of our readers.
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Petroleumworld
08/26/07
Copyright ©2006
Mary
King . All Rights Reserved.
